ARK Invest CEO Cathie Wood rolled out a new exchange-traded fund (ETF) today, and as usual, investors are interested. The ARK Transparency ETF (BATS:CTRU) began trading under the CTRU ticker today, the ninth fund under Wood’s domain. In stark contrast to many of her disruptive funds, CTRU will be passively managed.
The fund will index stocks that offer transparent, open and consistent lines of communication with investors. Compared to the majority of actively managed ARK funds, CTRU seems far more conservative. Maybe appropriately so.
Almost all of the ARK funds, save the ARK Autonomous Technology and Robotics ETF (BATS:ARKQ), are down for the year. The biggest loser, the ARK Genomic Revolution ETF (BATS:ARKG), has slipped 31% year to date. The lackluster performance hasn’t gone unnoticed, either. Wood’s flagship ARK Innovation ETF (NYSEARCA:ARKK) has lost $1.4 billion since June.
Unfortunately, the struggles of Wood’s other funds cast a heavy cloud on the CTRU ETF’s debut. However, the fund manager still has a devoted following, and ARKK can tout a great 2020.
With that in mind, what stocks are in the new Transparency ETF? And why is it worth looking into?
What Is the ARK Transparency ETF?
As previously mentioned, the fund is prioritizing transparency above all else. The CTRU ETF tracks the 100 most open companies, based on disclosure frequency, public image, and the presence of any pending lawsuits.
“ARK believes that transparency enhances the performance of companies while benefiting the well-being of people. Transparency implies openness, communication, accountability and trust. … ARK believes transparent companies have less friction which could lead to exponential growth opportunities.”
Like ESG funds, industries considered harmful to people — like alcohol, gambling and fossil fuels — are excluded from the index. Banks are also not included.
The ARK Transparency ETF currently has heavy holdings in tech stocks, with 42% of stocks falling under the category. This include some historical disrupters, like Tesla (NASDAQ:TSLA).
What other names join Tesla on the list?
10 Top Stocks to Watch in the CTRU ETF
- Nvidia (NASDAQ:NVDA) takes the top spot on the list. CTRU is currently holding 96 shares of the company, making up 1.51% of the fund.
- MaxLinear (NYSE:MXL) comes in second, with 410 shares accounting for a 1.46% weight.
- Enphase Energy (NASDAQ:ENPH) is No. 3 on the list. The 134 shares of the solar energy company account for 1.45% of the ETF.
- American automation company Teradyne (NASDAQ:TER) is fourth, with 184 shares making up 1.42%
- Cloudflare (NYSE:NET) is also present on the list, with 178 shares accounting for 1.35%.
- Bloom Energy (NYSE:BE) comes in at the No. 5 spot. The CTRU ETF contains 1,080 shares of the company, also for 1.35% weight.
- HP (NYSE:HPQ) is also a big player for the Transparency ETF, with 740 shares worth 1.34%
- Little needs to be said of industry titan Tesla. The EV maker is good for 26 shares, making up 1.33%.
- The first clothing company on the list, Buckle (NYSE:BKE), is present for 514 shares worth 1.25% of the ETF.
- Rounding out the list is Intuit (NASDAQ:INTU). The Transparency ETF holds 38 shares of INTU stock, accounting for 1.24% of the fund.
On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.